Interactive Map: Where NJ’s High Property Taxes Are Highest (and Lowest)
Over the past six years, property taxes have climbed by as much as 35 percent, but some communities have seen average bills remain stable or even declined
New Jersey’s highest-in-the-nation property taxes rose again last year by more than the state cap allows, and while schools remain the biggest spenders of tax dollars, municipal governments have been driving the nearly 13 percent increase since Gov. Chris Christie took office.
Between 2015 and 2016, the average homeowner’s tax bill rose to $8,549, an increase of 2.3 percent, which was slightly higher than the 2 percent cap Christie put into effect in 2011, according to an analysis offrom the state Department of Community Affairs. The Consumer Price Index, a measure of inflation, rose about 1 percent between 2015 and 2016. Inflation rose 10 percent from 2010 to 2016, while the average property tax bill increased 12.8 percent.
Because the cap is on the tax levy, not the tax bill, changes in tax bills are also affected by changes in property assessments and the total amount of property ratables in a community.
Christie spokesman Brian Murray said the average tax increase since Christie took office is “very close” to 2 percent and it “would have been lower had the Legislature not incorporated exceptions to the 2 percent caps, exemptions the governor advocated against.” Exemptions include health benefits and pension costs, as well as expenses arising due to an emergency.
“More importantly, the rate of increase is far below the astounding 7 percent-per-year tax growth New Jersey averaged during the decade preceding the governor's arrival in office,” Murray said. “While we need to continue tax reform in New Jersey, imagine where the Garden State's property taxes would be if not for Gov. Christie’s reforms and if annual average increases continued at a rate of 7 percent for the past seven years?"
However, virtually all homeowners had gotten rebates to offset their property taxes prior to Christie’s suspending the program in his first year in office and then adopting a much reduced program for future years. During the the first three years of the four-year term of Christie’s predecessor, Jon Corzine, all but the wealthiest owners got rebates averaging more than $1,000 to offset those taxes.
For instance, in 2009, Corzine’s last year in office, the average property tax bill in New Jersey was $7,281. However, the average rebate of $1,037 brought the net tax down to $6,244.
DCA no longer includes average rebate information in its property tax spreadsheet and even deleted it from the data posted for pre-Christie years. Because not every homeowner gets a rebate today, it would be difficult to use an average rebate to offset the average bill, although Democrats legislatively continue to try – and fail – to force the Christie administration to again include the rebate information in the public property-tax spreadsheets.
Today, only homeowners with less than $75,000 in income — $150,000 for the elderly and disabled — are eligible for. In May 2015, fewer than 30 percent of all property owners got a credit, averaging $473, on their tax bills.
The largest portion of a homeowner’s property tax bill, 52.4 percent on average last year, funds public schools. About 30 cents of every dollar pays for municipal services and the rest covers county government. Last year, the tax levy for schools rose slightly more than for municipalities or counties. But from 2010 to 2016, the local government levy increased the most, by 15.8 percent. Jon Moran, senior legislative analyst at the New Jersey State League of Municipalities, said there could be a number of reasons for the difference, many attributable to the slow recovery from the Great Recession:
Municipalities collect the property taxes and always give counties and school districts their full levy, but when there is a shortfall, towns have to bear it from a reserve for uncollected taxes that they have to levy. As foreclosures rose post-2008, tax collections fell, burdening municipal budgets.
Tax appeals also increased as property values fell. Municipalities “bear the cost” of defending against appeals and are responsible for reimbursements who appeals are successful.
County aid has been stable and, after a cut in 2010, school aid has risen slightly. Municipalities, though “are still being annually denied the $320 million cut” in 2008-2010.
“Bottom line,” Moran concluded, “municipal budgets bear the lion’s share of the problems when the economy goes bad.” There is an additional check on school districts’ spending, said Frank Belluscio, deputy executive director of the New Jersey School Boards Association: “In addition to the levy cap, school district budgets are subject to an administrative spending-growth limit, and review by the executive county superintendent.”
While the average property owner, with a home valued at nearly $302,000, last year paid $8,549 — $196 more than in 2015 — taxes paid varies wildly by municipality. Camden’s $1,616 average bill was the lowest in 2016 and one of four towns where the average owner paid less than $2,000 in taxes. Most of the lowest tax bills were in South Jersey. At the other extreme, four municipalities had average bills exceeding $20,000, with Millburn homeowners paying the most — $23,327. The highest tax tabs were concentrated in north-central Jersey in Morris, Essex, and Somerset counties, and in the extreme northeast in Bergen County.
The change in taxes was not as concentrated geographically, but distributed throughout the state. Homeowners in 59 municipalities saw their average property tax bills remain unchanged or drop with the biggest decline nearly 30 percent in tiny Tavistock in Camden County. On the other hand, the average bill rose by more than 10 percent in two communities: Logan in Gloucester County had a 13.3 percent increase and Audubon Park in Camden had a 15 percent tax hike.